Decided on February 18,2007

V.P.L.TRAVELS (P) LTD. Respondents


A.K.SIKRI, J. - (1.) By means of this application filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), the applicant (for short, 'the applicant') seeks appointment of an arbitrator on the ground that some disputes have arisen between the applicant and the respondents and as the contract between the parties contained arbitration agreement, the said disputes are referred to be decided by the arbitrator.
(2.) It is the case of the applicant that it is a premier organization of travel agents in India and enjoys an enviable reputation in the travel and tourism industry. Prior to the year 1992, travel agents in India were receiving credit facilities from Indian Airlines Corporation (for short, 'IA') for the sale of passenger tickets against furnishing their individual bank guarantees which were causing great hardship to them. However, the applicant negotiated and executed an agreement dated 30.4.1992, which is labelled as guarantee agreement, pursuant to which the applicant made a deposit of Rs. One Crore with the IA from the common funds generated by the applicant amongst its members by way of initial deposit of membership fee etc. It was provided under the agreement that in the event of any member of the applicant association defaulting in its obligation towards IA, to that extent the IA could make an appropriation/adjustment from the aforesaid deposit of Rs. One Crore made by the applicant with the IA. The respondent No.1 became member of the applicant association and deposited a sum of Rs.1,84,000/- as security with the applicant. The respondent No. 2, who is the director and principal officer of the respondent No.1 became guarantor for the respondent No.1 for discharge of their liability under the agreement. As member of the applicant association, the IA permitted the respondent No.1 to sell the passenger tickets of Indian Airlines flights. Against these tickets sold by the respondent No.1, the respondent No.1 was to make payments to the IA. In December 2001, the applicant was informed by the AIP-9(IA) that the respondent No.1 had defaulted in making payment of the amount under the aforesaid guarantee agreement and there was a liability of Rs.42,20,037/-. The IA accordingly adjusted this amount from the deposit Rs. One Crore, which was given by the applicant to it. The applicant, thereafter, made repeated requests and demands to all the respondents to repay the said amount, but the respondents did not pay anything. Ultimately, notice dated 3.12.2001 was served upon the respondents by the applicant calling upon the respondents to pay to the applicant the aforesaid amount within 30 days along with interest @ 24% p.a., failing which the respondents shall also called upon to agree to refer all disputes to the arbitrator of Mr. Kavi Kohli, Chairman NR-TAAI as per Clause 19 of the agreement, which is the arbitration clause. Even thereafter, no reply was filed and in these circumstances the present petition is filed with the prayer that either appointment of Mr. Kavi Kohli be made or in the alternative some other person be appointed to act as an Arbitrator. Copy of the agreement between the applicant and the respondent No.1 is filed, Clause 19 whereof reads as under :- "19. Any dispute or difference arising of this Agreement shall be referred to a single arbitrator to be appointed by both the parties under the provisions of the Indian Arbitration Act, 1996 as amended from time to time."
(3.) Notice of this petition could not be served upon the respondents by ordinary process. The applicant was accordingly allowed to serve the respondents by publication in the newspaper 'The Statesman' (New Delhi Edition). Notice has been duly served by the aforesaid mode, still nobody appeared on behalf of the respondents. In these circumstances, I have heard counsel for the petitioner.;

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